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RUGGIERO v. COMPANIE PERVANA DE VAPORES

July 10, 1980

Domenico RUGGIERO, Plaintiff,
v.
COMPANIE PERVANA DE VAPORES "INCA CAPAC YUPANQUI", Defendant; Simon DODSON, Plaintiff, v. POLSKIE LINIE OCEANICZNE GDYNIA "DOMEYKO", Defendant; Ciro LOCASCIO, Plaintiff, v. P. M. JAKARTA LLOYD "DJATIPRANA", Defendant



The opinion of the court was delivered by: SIFTON

MEMORANDUM DECISION AND ORDER

The three above-captioned cases are personal injury suits by longshoremen seeking money damages pursuant to the Jones Act, 33 U.S.C. 905(b). In each case the defendant is a shipping company which is wholly owned by a foreign government. Each defendant has moved to strike the jury demand arguing that a jury trial is barred by the Sovereign Immunities Act of 1976 (the "Immunities Act"), 90 Stat. 2891. Plaintiff in each case contends that the Immunities Act either has no such effect or that if it does, the Immunities Act is unconstitutional under the seventh amendment.

 Because the issue on these motions involves the constitutionality of a federal statute, notice was given to the Attorney General pursuant to 28 U.S.C. 2403(a); the Attorney General chose not to intervene. For the following reasons the motions of the defendants are granted, and the jury demand is struck in each of these three cases.

 Prior to the enactment of the Immunities Act, these cases would properly have invoked diversity jurisdiction under 28 U.S.C. 1332(a)(2). Before 1976 that section provided that: "(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds . . . $ 10,000 . . . and is between-(2) citizens of a State, and foreign states or citizens or subjects thereof . . . ."

 The Immunities Act added a new section, 28 U.S.C. 1330, which provides in relevant part:

 
"The district courts shall have original jurisdiction with out regard to amount in controversy of any nonjury civil action against a foreign state as defined in section 1603(a) of this title or to any claim . . . with respect to which the foreign state is not entitled to immunity . . . ."

 Section 1603(b) of Title 28, which was also added by the Immunities Act, defines "foreign state" to include

 
"any entity . . . which is a separate legal person, corporate or otherwise . . . a majority of whose shares is owned by a foreign state (...and) which is neither a citizen of a State of the United States . . . nor created under the laws of any third country."

 Thus, the defendants in the present cases are all foreign states within the meaning of the Immunities Act.

 The Immunities Act amended 28 U.S.C. 1332(a)(2) to delete its reference to "foreign states." Section 1332(a)(2) now provides jurisdiction only over suits between "citizens of a State and citizens or subjects of a foreign state." A new section was added, 28 U.S.C. 1332(a)(4), providing diversity jurisdiction over suits between "a foreign state, defined in section 1603(a) . . . as plaintiff and citizens of a State or of different States."

 Defendants contend, and this Court agrees, that the effect of these amendments is to eliminate any jurisdiction pursuant to 28 U.S.C. 1332 over suits between American citizens as plaintiffs and foreign states, as defined in 28 U.S.C. 1603(a), as defendants. The only jurisdictional basis for such suits is now 28 U.S.C. 1330(a) which provides only for nonjury trials.

 Defendants rely on a number of cases which have interpreted the Immunities Act to allow suits against defendant corporations which are owned by foreign governments either under 28 U.S.C. 1330(a) or under 28 U.S.C. 1332(a)(2). These cases hold that such corporations may be considered to be citizens of foreign states as well as foreign states and, thus, may continue to be sued under section 1332(a)(2) which allows diversity jurisdiction over suits between citizens of a State and citizens or subjects of a foreign state. These courts therefore conclude that whatever effect the Immunities Act "had upon the jury trial right of U.S. citizens suing a foreign sovereign or its political subdivisions and instrumentalities as such, it did not diminish the jury trial right of U.S. citizens suing foreign government-owned commercial corporations under 28 U.S.C. 1332(a)(2)." Icenogle v. Olympic Airways, 82 F.R.D. 36, 39 (D.D.C.1979). Accord, Rex. v. Cia Pervana De Vapores, 493 F. Supp. 459 (E.D.Pa.1980); Houston v. Murmansk Shipping Co., 87 F.R.D. 71 (D.Md. 1980); Lonon v. Companhia de Navegacao, 85 F.R.D. 71 (E.D.Pa.1979). *fn1"

 The interpretation given the statute in Icenogle is a strained one. Although this Court might reach out to adopt such an interpretation, if it were consistent with Congressional intent, the interpretation adopted in Icenogle is in fact contrary to Congressional intent. *fn2" In explaining the reason for amending section 1332, the House Report explained that "(since) jurisdiction in actions against foreign states is comprehensively treated by the new section 1330, a similar jurisdictional basis under section 1332 becomes superfluous." H.R.Rep.No.94-1487, 94th Cong.2d Sess. at 14, reprinted in 1976 U.S. Code Cong. & Admin.News, pp. 6604, 6613 ("House Report"). The Immunities Act includes corporations such as defendants in its definition of foreign states, and to continue to allow jurisdiction over these defendants under section 1332 would be inconsistent with Congressional intent that section 1330 jurisdiction be "comprehensive" and jurisdiction under section 1332, "superfluous." The House Report further states: "As in suits against the U.S. Government, jury trials are excluded. See 28 U.S.C. 2402. Actions tried by a court without jury will tend to promote a uniformity in decision where foreign governments are involved." Id. at 6611-12. Such uniformity would be thwarted by allowing these suits to proceed under section 1332.

 Further evidence of Congressional intent is found in the treatment of removal jurisdiction in the Immunities Act. The Immunities Act added a new section, 28 U.S.C. ...


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